Dassault improves margin in 2018, expects even better for 2019

Dassault Aviation published its financial result for the year 2018. The aircraft manufacturer reports a net profit of €681 million for its 2018 fiscal year, against €410 million in 2017.

Total revenue generated was of € 5.084 billion in 2018 against € 4.876 billion in 2017, for an operating profit of € 669 million against € 357 million in 2017. The operating margin was 13.2%, compared to 7.3% in 2017.

Its order book currently includes 101 Rafales (73 for export and 28 in France) and fifty-three Falcons.

The year was marked by several major events for Dassault Aviation both in military and civil sector:

On February 28, 2018, Dassault Aviation unveiled its new business plane, the Falcon 6X. This new variant of the Falcon family came as a replacement for the 5X project, canceled after Safran failed to deliver its new Silvercrest engine on time. The dispute between the two manufacturers was settled on September 6, 2018, when Safran agreed to compensate Dassault for $280 million. The Falcon 6X is expected to enter service in 2022.

Dassault Aviation chose Paris-Le Bourget (LBG) – where Charles Lindbergh landed after the first transatlantic flight in history – to reveal its new plane: the Falcon 6X. The brand describes it as “the most spacious, advanced and versatile twinjet in business aviation.”

This year, the manufacturer also lost its emblematic CEO and Chairman, Serge Dassault. The businessman passed away on May 28, 2018.

The CEO and Chairman of Dassault Group, Serge Dassault, passed away at 93 years old from a heart failure on May 28, 2018. Following the legacy of his father, the businessman helped his company enter the 21th century to become one of the leading European military manufacturers and a respected business jet brand.

In 2018, Dassault was also awarded the leadership of the Franco-German fighter jet program, the FCAS. The news was welcomed by the manufacturer, whose CEO Eric Trapper requested the governance of the project on February 28, 2018 in front of the French Parliament. “Dassault needs to be an architect of the program, as it is the most skilled company in Europe in the field of fighter planes,” said Trappier, adding there was a legitimate need for a new fighter plane in Europe to guarantee the continent’s sovereignty industrially and strategically.

France was given development leadership of the sixth-generation European-made fighter jet program on June 19, 2018, with expectations to start study phase by the end of 2018 and demonstration phase in mid-2019. First deliveries are expected for 2040.

On January 14, 2019, Dassault Aviation was contracted with the development of the Rafale’s new F4 Standard by the French Ministry of Armed Forces. The contract is estimated at €2 billion, and should extend the fighter jet‘s operational life until 2050. The update is aimed at improving the connectivity of the Rafale with other systems, through “new satellite and intra-patrol links, communication server, software radio,” as phrased by Dassault.

This massive improvement of the backbone of the French Air Force is one of the needed evolutions to extend its operational life until 2050, date after which the Rafale should be retired from service. Eventually, it should be replaced by the FCAS, of which Dassault is the main contractor, with Airbus as a partner.

Dassault Aviation saw Qatar exercise an option for twelve additional Rafales. Three of the fighter jets were delivered to the French Air Force, and nine to the Egyptian military.

The group expects to deliver 45 Falcons in the coming year, and 26 Rafales, which should boost its revenue even more. 2019 sales are also expected to rise sharply.